The income effect of a decrease in the price of macaroni and cheese (assume this is an inferior good) results in
A) an increase in the demand for macaroni and cheese.
B) an increase in the quantity of macaroni and cheese demanded.
C) a decrease in the quantity of macaroni and cheese demanded.
D) a decrease in the demand for macaroni and cheese.
C
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When the price level increases, aggregate planned expenditure decreases, which leads to
A) a rightward shift of the aggregate demand curve. B) neither a movement along nor a shift of the aggregate demand curve. C) a downward movement along the aggregate demand curve. D) an upward movement along the aggregate demand curve. E) a leftward shift of the aggregate demand curve.
The business cycle is usually illustrated using movements in
A) the inflation rate. B) labor productivity. C) real GDP. D) the size of the labor force.
Which of the following explains why the U.S. poverty threshold increased from $3,000 per year in 1963 to $25,000 per year in 2017?
A. Inflation has caused the price for basic necessities to increase since 1963. B. Americans are more spoiled now than they were in 1963. C. The threshold includes more luxury items now than it did in 1963. D. The government has become more benevolent than it was in 1963.
To calculate real GDP, we
A. Adjust the market value of goods and services for changing prices. B. Measure in the prices of goods and services of that period. C. Estimate future prices of goods and services. D. None of the choices are correct.